Dealers who design processes and pay plans to sell accessories can realize millions in untapped revenue.
LAS VEGAS – Psst! Want an extra $2 million in annual gross revenue?
Devise a system to get your parts, service and sales staff on the same page to sell accessories consistently. That’s how leaders at stores with astronomical accessory sales achieve those goals, David Stringer, CEO and founder-Insignia Group, tells attendees at the recent Digital Dealer conference.
“What general managers and dealer principals are missing is to motivate, to push through the complications,” Stringer tells Wards. “So it’s just accepting that this is a complicated piece of your business. You need to get your managers together and make them implement this for their customers, salespeople and employees. It will benefit everyone.”
Stringer leads clients to such success by likening the process to regular gym membership use. Yes, you achieve health goals by committing to regular exercise, but that comes with a price that may include changing your clothes, driving to the facility, missing family events and more. The process is slightly time-consuming and convoluted, says Stringer, but not unwieldy. And payoffs can be dramatic.
Here are steps Insignia clients, including the aforementioned store with $2 million annual accessory sales, take to ensure accessory sales are routine parts of every deal.
Determine what accessories are readily available. Supply constraints make some parts difficult to access. Don’t offer those. Instead, concentrate on what is in stock or readily obtained. Only quote retail prices with installation. Stringer recommends bundling the price of the accessory and installation. Shoppers want and accept that sort of pricing.
Make accessory sales a part of each deal. Many times salespeople offer accessories as an afterthought. Instead, salespeople should take time to talk about accessories that fit the buyers’ interests, such as camping.
Stringer likens it to a stop during a train trip. Rather than offer refreshments from a beverage cart, a visit to refreshment stands results in more sales.
“You’ll hear ‘I was going to order a bike rack,’ or ‘I didn’t know you sold trailer hitches,'” he says. “Or they’ll say, ‘Look at those wheels. Yes, I’ll pay for those.’ They’re excited about the vehicle. They aren’t going to nitpick on the cost of accessories. So price conscientiously to ensure you are protecting the markup, so everyone makes money off these sales.”
Motivate salespeople with a straight 10% commission on retail sales and installation. Some dealers make a pay plan overly complicated by only paying salespeople for the retail price of the accessory. That demotivates staff and creates extra accounting work.
Stinger recommends a 10% straight commission paid to salespeople on the full price – retail sale and installation. So, a $500 sale of an installed accessory would net the salesperson $50.
“It’s important to pay that top-tiered salesperson something he can see that’s measurable in his paycheck, so he continues to get excited about the sales,” says Stringer. “All too often dealerships get right on the edge of putting this process in place, salespeople get excited and then managers come up with a payment plan that destroys the whole concept.”
Make the appointment for installation at the close of the deal. Successful dealers book appointments for accessory installation before the customers drive their new cars off the lot. That brings buyers back to the dealership for a positive experience.
Stringer recommends training lower-level techs and lot attendants to handle simple installations on the lots to keep bottlenecks from forming in service bays.
“Let’s make it uncomplicated and put it into the digital retailing process. Let’s offer it to every single customer,” he says. “And now you have a way to change this industry almost overnight. So it’s super exciting.”